J.P. Morgan Chase has agreed to buy Bear Stearns for $2 a share in an all stock deal. Bear Stearns shareholders will get 0.05473 shares of J.P. Morgan in exchange for their shares, which puts a value of $236 million on Bear. The boards of directors of both companies have approved the transaction.
Update: Articles up at the Wall Street Journal and the New York Times.
Update II: JP Morgan Chase is having a conference call at 8 PM to review the acquisition of Bear Stearns. Call (800) 214-0745 (domestic) / (719) 457-0700 (international), with the access code 614424, or listen via live audio webcast. Thanks to Mr. Pink for the details.
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Bear Stearns
JP Morgan Agees To Buy Bear Stearns In Stock Deal
Deal Values Bear Stearns At $2 Per Share
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- Use the Bloomberg command
NH BLG_DEALBREAKER <GO>
to access Dealbreaker
markets to sell-off bigtime tomorrow. $2/share will scare people by implying shit’s a lot worse than people imagined.
$2/share implies some pretty nasty assets on the books.
SP futures are up 1.50.
Jamie Dimon is a fucking genius. That building alone has to be worth three times that, even in the current real estate market, and the prime brokerage business is probably worth a similar amount.
I do feel sorry for the employees… they lose their job and their assets (employees owned 1/3rd of the firm)… reminds me of Enron.
$2 a share. Next week will be a shitstorm.
WSJ reported Friday that 383 Madison is worth about $1.2 billion – What happens when people show up at work tomorrow?
Conf call starts in three minutes:
JPMorgan Chase will host a conference call today, Sunday, March 16, 2008, at 8:00 p.m. (Eastern Time) to review the acquisition of Bear Stearns. Investors can call (800) 214-0745 (domestic) / (719) 457-0700 (international), with the access code 614424, or listen via live audio webcast. The live audio webcast and presentation slides will be available on http://investor.shareholder.com/jpmorganchase/presentations.cfm under Investor Relations, Investor Presentations. A replay of the conference call will be available beginning at 11:00 p.m. (Eastern Time) on March 16, 2008, through midnight, Monday, March 31, 2008 (Eastern Time), at (888) 348-4629 (domestic) or (719) 884-8882 (international) with the access code 614424. The replay also will be available on http://www.jpmorganchase.com.
Futures prices now (at this moment) are worthless. No one is in, even overseas.
Here is current real time US futures:
DJIA INDEX FUTURE Jun08 CBT DJM8 11935e -49 19:49
S&P 500 FUTURE Jun08 CME SPM8 1279.50 -13.50 19:59
NASDAQ 100 FUTURE Jun08 CME NDM8 1706.50 -18.00 19:59
CNN/Money says the deal will close in June:
“The fast-track deal is expected to close by the end of June, the statement said.”
http://money.cnn.com/2008/03/16/news/companies/jpmorgan_bear_stearns/
June DJIA futures now down -150.
SPX -32 pts. We’re fucked.
So what if the building is worth 1.2b?
If he’s buying the company he’s buying assets and liabilities. The real question is the nature and scope of the liabilities they’ve just bought into.
He’s only a genius if the end result somehow ends up being worth more than the instant $236m dilution.
This suggests that Bear was going to have to file ch. 11 tomorrow and that the loss to JPM as a result of filing would have been much greater. I’d reserve judgment on this until the dust settles. The fed will throw liquidity at JPM to help keep the whole system afloat but JPM is the one that has to live with whatever liabilities it just took on.
A lot of people will be taking really hard looks at Lehman tomorrow.
I bet JP still overpaid.
Lehman? How about everybody? These guys said on a conference call they had 80 bucks of book value on Friday. What assets are they marking down so much further?
And now they’re claiming they are comfortable with the marks. Isnt there a hole here were missing? If the marks that implied 80 bucks of book were good marks, than how will is this company worth only 2?
I remember way back when Jimmy Cayne informally remarked that he would never sell for less than double the book value. Now this asshole is holding a bunch of penny stocks. Who would have ever thought that Sykes and Cayne would be in the same foxhole. Watch out Jimmy, I have heard that Timmy is a butt pirate.
Then again pot makes me horny. Jimmy might be game for anything.
After reading these headlines, I can’t shake the image of little Jimmy Cayne, riding a ski-festooned bicycle and screaming, “I want my two dollars!” (in the spirit of the movie ‘Better Off Dead’)
Somewhere Meredith Whitney is laughing her a@@ off.
Dollar at 96.88 Yen, Nikkei down nearly 400 in 30 minutes
8:25: they lied, either then or now or both.. moral of the story is never trust a company whose initials are BS
I would have loved to have seen the expression on the person on the other side of Jamie Dimon when they slid over their bid, and it read $2 per share. Wow.
You know what pisses me off? I had Countrywide and Citi to tank in the office pool.
Lesson learned: never bet against Jimmy Cayne…
Jamie D is a genius. No other bank has the balls to try to swallow anything now. Not even B of A. Though not worth $80 a share, I am sure it is worth more than $2. For crying out loud, the building was built late 90s/early 2000s? Unless they had a HELOC, the books are worth more than $2. Easy arb right there.
Open Offer to Jimmy Cayne — looking to unload that little “pied a terre” you bought at the Plaza last week? I’ll pay you $2/square foot and throw in a dime bag …
(yeah, yeah … you might have thought of it, but “I” am the one who made the offer)
Just wondering … Has anyone heard any comment from ACE GREENBERG during any of this implosion (or has the poor guy been sedated and put on life support somewhere???)
$2 – is price indicative of present value. Yeah, with panic discount.
Gad, Bear Stearns is getting raped.
Calm down people-baying-for-kill.
Houston, we have a problem – Bankruptcy!
Jack: “What is happening in the US?! So, as we all know Bear Stearns more or less went bankrupt… Then JPMorgan buys them for 2 Dollars a share before the markets even open on monday! And the FED cuts rates by 0.25% on sunday?”
John: “Oh, I guess you didn’t get the memo? I think we just went bankrupt, those dollars you were using are now worthless, it’s time to launch the lifeboats!”
Jack: “Holly, Holly, Holly, John, we are 300 milles over Atlantic and without oxygen!”
Duric Aljosa
http://cromalternativemoney.org